The purpose of this paper is to develop the hypothesis that corporations are a particularly suitable instrument for rent seeking. Benefits are reaped by powerful companies…
Abstract
Purpose
The purpose of this paper is to develop the hypothesis that corporations are a particularly suitable instrument for rent seeking. Benefits are reaped by powerful companies, whereas a great deal of the costs is passed on to weakly organized groups.
Design/methodology/approach
The paper develops and substantiates the hypothesis theoretically and gives some indications. Moreover, a case study is added which refers to the German electricity market.
Findings
Equity seems to be indispensable to get access to land and other assets with similar characteristics as land. At the same time, profits appear to reflect the rent-earning capacity of the company's assets. High land rents stimulate investment intensity, and corporations can collect the necessary funds. The flip-side of rents is often the externalization of costs. Also, due to their limited liability, corporations externalize risks.
Originality/value
The paper provides a rationale for the common criticism of corporations, which is based on the reflection of equity as the key to land (in a broad sense) and (land) rents as the core of profits. If the findings hold true, corporations should be subject to particular regulatory observation. In particular, the corporate constitution of corporations and the taxation framework should try to get a better coupling of benefits and costs.
Details
Keywords
The paper seeks to develop a research hypothesis: although individual companies deviate, in an average observation equity seems to reflect the value of land, and profits appear to…
Abstract
Purpose
The paper seeks to develop a research hypothesis: although individual companies deviate, in an average observation equity seems to reflect the value of land, and profits appear to reflect the land rent‐earning capacity of the company's assets.
Design/methodology/approach
This hypothesis is based on a broad interpretation of the almost forgotten production factor – land, as an exclusive real option. The article substantiates the connection between equity and key assets preliminarily by considering samples of balance sheets of Germany and the UK.
Findings
The land rent (in a wide sense) is hidden in many cases and diffusing on assets with similar features as land. Access to land (in a broad sense) and the foundation of the profits on rents appear to be an essential base for sustainable performance of companies.
Originality/value
If the hypothesis holds true, equity is nothing other than indirect participation in land (in a broad sense), with impacts on many concepts. For instance, investment policy of pension funds had to be revised, since old‐age provision in stocks would be an indirect investment in land – but an economy as a whole cannot build its savings on land. A consequent taxation on land and other natural resources could replace business taxation. Only a sound endowment with equity opens the access to land and similar assets, which is a challenge for small and medium sized companies.
Details
Keywords
Katharina Löhr, Frieder Graef, Michelle Bonatti, Henry F. Mahoo, Jane Wambura and Stefan Sieber
This paper aims to analyze the transferability of a conflict management model developed for business organizations to a temporary and international research project to serve as a…
Abstract
Purpose
This paper aims to analyze the transferability of a conflict management model developed for business organizations to a temporary and international research project to serve as a support tool for internal communication and in case of conflict.
Design/methodology/approach
The authors analyze the transferability of a conflict management model that was initially developed for business organizations to an international, inter-organizational and temporary research project that is third-party funded. Using a case study, a participatory approach is applied with both qualitative and quantitative methods used.
Findings
The transferability is possible but only with the adaption of conflict prevention. The project’s international and inter-organizational structure further results in a need for decentralization of conflict management responsibilities and diversification of conflict management approaches. Time, financial resources and a high autonomy of cooperation partners limit the degree of participation in the design process.
Research limitations/implications
The research is based on a case study. Research on comparative design processes are needed to verify or extrapolate findings and to help assess the impact of conflict management systems in other large research projects.
Originality/value
This paper contributes to the body of knowledge on conflict management systems. By implementing a conflict management system in a temporary, international and scientific project environment, this case study identifies contextual factors relevant for the system design and provides initial test results. As conflict management systems in research projects are not yet prominent, this adapted model of conflict prevention and management can benefit similar projects.